RTS Futures Fall on Oil as Sandy Closes Market: Russia Overnight

Russian stock futures retreated and contracts for OAO Rosneft, the nation’s biggest oil producer, slipped as Hurricane Sandy approached the U.S. East Coast, driving down crude prices.

December futures on Russia’s RTS Index declined 0.5 percent to 142,320 during New York trading hours as U.S. equity markets shut because of the storm. Russian shares listed in the U.S. didn’t trade after the Bloomberg Russia-US Equity Index dropped 3.8 percent last week. Crude headed for the lowest close in three months, losing 0.3 percent to $85.33 a barrel in after-hours trading on the New York Mercantile Exchange today.

Crude tumbled as much as 1.9 percent in New York yesterday as U.S. refineries reduced operations ahead of Sandy. Oil is Russia’s biggest export earner and along with natural gas contributed about 50 percent of government revenue last year. Moscow’s Micex Index slid 1.8 percent last week as oil had its biggest decline since the third week of September.

“With oil showing downward movement and no direction from the U.S., the Russian markets are continuing their negative movement from last week,” Ilya Kravets, who helps manage $100 million of investments at ED Capital LLC in New York, said by e-mail yesterday.

The RTS Volatility Index, which measures expected swings in futures, fell 0.5 percent to 27.53 points. Volume of trading in RTS stock index futures fell to 20 percent of the average daily volume in the past three months yesterday, data compiled by Bloomberg shows.

‘Driving Factor’

“The market is dead because of the hurricane,” Igor Nuzhdin, an analyst at OAO Nomos Bank in Moscow, said by phone yesterday. “Investors are lacking direction. Oil remains the only driving factor and it pushes us down.”

Futures on the ruble weakened 0.1 percent to 31.758 per dollar yesterday.

Futures on Rosneft fell 0.3 percent yesterday as the stock slid 0.3 percent to 230.98 rubles in Moscow. Contracts on OAO Surgutneftegas, Russia’s fourth-biggest oil producer, declined 0.2 percent yesterday while the stock retreated 0.9 percent to 27.357 rubles in Moscow.

Oil fell for a second day in electronic trading today as Sandy slammed into southern New Jersey and churned north over land. The storm, the largest in the Atlantic on record, has been downgraded to a post-tropical cyclone by the National Hurricane Center. Crude prices are down 14 percent this year.

Brent oil for December settlement slipped 0.1 percent to end the session at $109.44 a barrel on the London-based ICE Futures Europe exchange yesterday. Urals crude, Russia’s main export oil blend, fell 0.7 percent to $107.75 per barrel.

Altimo Stake

Altimo, the Russian investment company fighting Telenor ASA for control of U.S.-traded mobile provider VimpelCom Ltd., said yesterday that it boosted its voting stake in the company to 47.85 percent. Telenor owns 43 percent of VimpelCom’s voting shares.

“This will bring the balance of power back to Altimo,” Markus Bjerke, an analyst at Arctic Securities ASA in Oslo with a hold rating on the shares, said by e-mail yesterday. “Shareholder conflict is likely to ease in the near term and dividends are likely to resume. Although we think it is premature to call off the shareholder conflict, the situation has improved for the medium term with regard to VimpelCom share price performance.”

OAO Mechel, Russia’s biggest producer of coal for steel makers, increased coal production by 5 percent to 20.8 million tons in the January-through-September period, the company said in a statement after the market closed in Moscow yesterday. Mechel increased steel production by 13 percent to 5.1 million tons during the period, according to the statement.

United Co. Rusal, the world’s largest aluminum producer, dropped 1.6 percent to HK$4.23 in Hong Kong trading as of 11:20 a.m. local time. The MSCI Asia Pacific Index gained 0.3 percent.

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